Monday, August 23, 2010

The customer told the product manager he needed a new train to go from New York to San Francisco.
The product manager commissioned his engineers to build it.
It would cost one million dollars.
So the money was spent.

The product manager found the train inadequate. "It needs to carry passengers," he said.
It would cost another three million dollars.
So the money was spent.

The product manager found the train inadequate. "We need to feed passengers on this journey," he said.
It would cost another six million dollars.
So the money was spent.

The product manager found the train inadequate. "Surely the passengers will need to carry luggage too," he said.
It would cost another three million dollars.
So the money was spent.

The product manager found the train inadequate. "The train should be efficient -- build me a train that uses less fuel," he said.
It would cost another eight million dollars.
So the money was spent.

The customer called. He said a competitor had finished building the train he wanted.
It would cost less than ten thousand dollars.
So the product was bought.

The competitor was Brio.
The buyer worked for Amtrak.
The user was his 8-year-old son.
New York and San Francisco were models the buyer had built for his son.

Always remember the difference between the buyer and the user.
Build according to the user's needs.

Saturday, May 15, 2010

Results-driven team player seeks employment. Highly effective team player. We use these phrases so commonly in our resumes and curriculum vitae that we sometimes forget what that's really supposed to mean.

Remember Karri Strug? Despite injury, she delivered a near-perfect gymnastics routine at the Olympics in 1996. Quoting Wikipedia: "The completed vault received score of 9.712, guaranteeing the Americans the gold medal.[3][5] Karolyi carried her onto the medals podium to join her team, after which she was treated at a hospital for a third-degree lateral sprain and tendon damage.[3][5] Due to her injury, she was unable to compete in the individual all-around competition and event finals, despite having qualified for both.[6]" She put her team before herself. She put her country before herself. Her photo belongs in the dictionary right next to the definition of team player.

Now think of the value of sports, or the military. The focal point is learning to work together to accomplish something that's bigger than you.

So what is a job? If you answered that you get paid to do something you're skilled at, you're only partially right. If you're a sole proprietor, maybe that's all you need to know, but most of us get paid by someone else to do something. Why do they pay us? Because they have a need? Well, yes; and now you're getting warmer, but you still don't understand the critical use case -- the reason why a job is important.

Point is this:: to be a team player, your preferences and well-being is secondary to the well-being of the team. In baseball, if there's a key player on base, athletes never step up to the plate hoping to get walked; they try to hit the ball so that someone can run home and score a point. By stepping up to the plate at all, they're taking a risk of getting injured, and that would be a travesty -- for the team to have lost them. The player has to have that mentality too.

To earn a job, you have to convince an employer that everyone in the company would benefit from having you on board. You would provide them with something they lack today. By employing you, everyone at the company and all of their investors would benefit. "I have skills" is only half of it. Can you serve your company? Are you an asset they can't do without? If you don't show up for work on time because the snooze button on your alarm clock is far more attractive than helping everyone in the company feed their families, you're not a team player and it would be a mistake to hire you.

If you have children, as I do, this concept is not foreign to you; you have to get up each morning to feed your family, and though it may be painful to drop off your children at daycare, as they cling to your leg and scream "Daddy, don't go!" you know that you can do a better job as a parent by going to work and earning the money that will be necessary to provide for them. That family team commitment does not release you from your duties to your work team, it's an additional reason why you need to stay healthy, perform your assigned duties, and pick up your kids at the end of your work day to still get some family time. Your work enables your work team to earn money. Your earnings at the end of the day enable your family team to support each other, provide for children, and/or allow you to live comfortably during evenings and weekends.

Wednesday, May 12, 2010

This is a rant about Arby's, but like all of my rants I dig into the business reasons of where the mistake was made and what was lost.

Situation:

As a special treat last week I decided to take my daughter out for a fast food lunch. We don't do this often, and I figured this would be an opportunity for me to demonstrate to her that new foods can be delicious.

A quick look through my Entertainment Book revealed there was a coupon for Arby's. The coupon was, "Free roast beef sandwich with purchase of roast beef sandwich of equal or greater value." So I put her in the car, and started talking about how wonderful roast beef sandwiches, and how when I was little, we would all meet at the local Arby's (then Rax) after softball practice.

By the time we arrived, my 3-year-old daughter was willing to give it a try as long as she still could get fries. We waited in line, she picked out what she would want to drink, and I got to the counter and requested a deluxe roast beef sandwich for myself and an "Adventure Meal" for her, with kids size roast beef sandwich. Apple sauce for her, curly fries for me (she could try some of my fries; they no longer carry regular fries at that location), I was given the total, and I presented my coupon.

"I'm sorry sir, but the coupon doesn't apply to kids roast beef sandwiches or to deluxe ones. It only applies if you buy two basic, adult-sized roast beef sandwiches."
"But you're only losing about $2 for a kids sandwich. Normally you would lose $5."
"Sorry, sir but those are the rules. The coupon is only good for an adult basic roast beef sandwich."
"She won't eat a full-sized sandwich even if I do downgrade mine to the basic. Can I speak to a manager?"
"I am the shift manager."

I could have given in, and probably would have if other alternatives were difficult to get to, but I was standing in a food court in the middle of the Great Mall. There are lots of other options, and most businesses are hurting. Especially during lunch time on a weekday. I suppose Arby's doesn't need my business that badly, or they want to call my bluff.

"Fine. Then cancel the order."

The "manager" sighed and then proceeded to clear out each item individually as we walked across the food court to McDonald's. I paid the same amount as I would have paid full price at Arby's, but I was offended that Arby's wouldn't honor my coupon, especially since I was willing to buy something more expensive than the coupon required. My daughter did try her cheeseburger -- about 3 bites. Oh well.

Marketing & Promotions Best Practices

Back to marketing and product management, which is what this blog is all about: a coupon is a company's willingness to negotiate in hopes of an upsell or repeat business that will make up the cost of the promotion. It forces the buyer to become aware of a business in their area and to try something new (as Mom always said, "try it, you'll like it!"). Buy 1 Get 1 promotions specifically are most effectively used to thin out the inventory and minimize inventory losses, though for the Entertainment Book it's usually the reason already specified above -- they want at least two customers to try something new, hoping they'll try it again.

For many promotions, the service staff then suggests an upsell option that offsets the cost of the promotion. For me, Arby's didn't even need to convince me to upgrade; I had already chosen my upgrade; cheese-flavored sauce does not cost them the $0.75 per sandwich I would have paid (more like $0.10 if that), and they had the opportunity to lose less on the second sandwich than they ordinarily would have.

How much more would it have cost Arby's to build infrastructure to handle more flexible coupons? Not much. In fact, they could have written it off as a free kids meal to make it easier on the cash register. Here's what Arby's lost:

If my daughter had liked Arby's sandwiches I would have brought her back a lot more often. Some kids are picky eaters, but at least my daughter isn't shy about saying what she wants. If she said "I want an Arby's" I would be happy to go out of my way to get her one to encourage her experimentation with new foods.

I now doubt they'll honor my other Entertainment Book coupons, so additional marketing dollars spent on me will be wasted.

My daughter remembers the food court as the place where she got that Happy Meal toy at McDonald's and will no doubt request McDonald's next time too.

Willingness to pay has changed over the past two years. Companies who don't adapt will find it hard to get customers.

Thursday, March 11, 2010

There are a number of companies out there that repackage open source software. Many misunderstand how selling open source software is different from selling proprietary software,, so I thought I would make it into a metaphor.

Imagine that you had two retailers, one is Wal-Mart, the other is Target, and they shared the same parking lot. They both sell roasted almonds. The prices can be anything, really, but generally Wal-Mart is thought of as the place where you can buy things for less, and Target is where people go to buy something that they know to be of decent quality. That is, people are willing to pay a little more at Target than they are at Wal-Mart because they trust the retailer. In fact, the almonds are exactly the same, but the perception is that I can get better brands and perhaps better service at Target so I'll pay a little more there.

Enter ABC Almond Company. ABC operates out of a tent that's positioned right between Target and Wal-Mart. They offer honey-roasted almonds. Of course, their product is a little different from what you can get elsewhere so there's a significant premium paid for these honey-roasted almonds.

Oddly, though customers are a little more trusting of Wal-Mart and Target than ABC, they aren't buying from any of the three. Why? Well, the parking lot has many trees to provide shade. The trees are almond trees. Customers can pick the almonds themselves for free, sort them for quality, and cook them any way that they wish. In fact, all three stores are selling almonds from those trees.

Customers willing to pay something to have it done for them go to Wal-Mart, and those that are picky about quality will shop at Target. Very few visit the ABC tent despite the fact that they're honey-roasted because they just don't recognize the ABC brand.

So ABC gets a bright idea -- they can sell their almonds through Target. Though it does increase their sales (if Target is carrying it, it must be good quality), they still aren't covering expenses. Why? Well, besides the fact that you can pick them yourself, there's still vigorous competition from Wal-Mart. Customers can buy them for less over there and add their own honey flavoring. Target still has the largest share of the three vendors because of the respect commanded by the brand, but since both Target and Wal-Mart attract value-sensitive consumers, most customers prefer to pick their own almonds.

Open source software is a lot like almonds. The many startups that have tried to repackage open source software are most like ABC. Target and Wal-Mart represent major brands like IBM, Red Hat, SuSE, Microsoft, etc.

To truly make it, software companies like ABC need both brand trust and a product that's both valuable and hard to duplicate. "Almond extract," for example, is not that easy to make, but would still sell better at Target and Wal-Mart than the ABC tent. ABC Software would need to sell the software equivalent through one of those established vendors to truly get some business.

Update: Keep in mind that like scrubbing open source for bugs, picking almonds is not easy either. You have to knock them down and their shells are very hard. Customers usually choose open source not realizing how much work is required. The perception is, however, that it's easy and the reseller doesn't add much value. It's like how Eleanor Powell made tap dancing look easy, or how judges are so critical of ice skaters' performance when they fail to deliver a quadruple-axle midair spin. Open source professionals are quite skilled at taking raw code and improving reliability, but until it looks hard, they won't get much credit.

Thursday, February 25, 2010

Microsoft, I'm a Linux guy. I like community-sourced software, and dislike behemoths that force people into a certain way of doing things. Having said that, I like Windows 7. It's really quite slick. Lots of little things have been fixed, some of which I didn't even realize were "broken" until I saw them repaired. Well done. Oh, except for one thing...

Sometimes you just can't predict when things will appear on your screen, and input gets misinterpreted. Like today, I was logging into my distance learning MBA program using IE8. IE8 has been slow recently, something I intend to troubleshoot, but my remedy for now is to default to Firefox. So I loaded IE8, started typing in the URL, and got tired of waiting for that "Internet Explorer is not the default browser" window to pop up so I hit enter, thinking that I would be able to stop the browser from loading my home page and instead load something useful.

As has happened many times before, the instant that I hit [Enter], Windows started drawing another box. I have no idea what it said, and since it was on my screen for less than a quarter of a second, I have no idea what was chosen when I hit the Enter button. All I know is that the URL field did not receive that carriage return.

No, it's not the first time. I'm sure all of my readers know of situations where they were in the middle of typing something and a window launched at just the wrong moment. My own mother confirmed this the other day, speaking of those times when you hit Enter and just half a second later (or less) the outline of a window appears. ...and at that point you know your keyboard's input was redirected to that window instead of where you just were. Sometimes that means I have made a change to my computer I don't know how to reverse, since I don't know what it was called.

So Microsoft, is there some way that keyboard input could get switched over to a window after the window has been drawn? After all, no human can truly answer yes to a question they haven't seen yet or have seen for less than 1/10 of a second. That's my "missing use case" for this post -- somehow, despite improved calculators, better start menus, better taskbars, and searchable program lists (yay!!), this usability detail got missed, and it drives all of us nuts

It's rare that a company gets highlighted here for something they do right. There are so many products and services out there that really are fantastic, directly addressing the customers' needs and it's taken for granted.

I'd like to share with you one such discovery that got my attention. Two-three months ago I went to Radio Shack needing a new battery for my GPS, hoping that even if they didn't have the battery, they would have the tools to help me get inside. As usual, I found myself surrounded by electronic devices that few people would have any need for. Yes, they have surge protectors and multimeters, but a lot of what they carried has limited appeal. You can order satellite TV through them, and they have a small selection of wireless and cellular phones, but I didn't know what half that stuff was supposed to be. As I walked back into the Radio Shack with the toolset I'd just bought to return it (the tools had only gotten me partway into the GPS's innards) I wondered just how long Radio Shack would be able to survive in the silicon valley given the multitude of alternatives with greater selection. "Oh well," I thought, "not every major metropolitan area has a Fry's, and they can continue to be the hit-or-miss 7-Eleven equivalent of the electronics world."

Between that time and last week it seems Radio Shack stores all over this area underwent major changes. Cell phones and their accessories are now a major part of what the store does. The DC adapters I was after not only wasn't behind the counter requiring an associate to help, they were on full display. Where there once was a small selection of cell phones and wireless phones now was a wide selection of GPS devices along with some of their accessories. What about radio parts? That's where the name "Radio Shack" came from, is it not? Yes, they have those, in the back of the store in tidy organized drawers. The service was helpful in determining that my DC adapter actually wasn't the cause of problems (the device itself has a loose connection), though I found myself helping other customers with the GPS wall in explaining the strengths and weaknesses of each brand. Still, for a quick service station they were fairly knowledgable.

Three days later I needed an unusual battery for a remote control and visited another Radio Shack. Same experience.

As I left the store, I realized that I had just witnessed what was probably at least hundreds of thousands of dollars in customer research about what customers buy and what is really needed in an electronics convenience store, and millions of dollars in remodeling and inventory changeout.

Friday, February 12, 2010

This blog is mostly about what happens when someone assumes something about the customer that turns out not to be true. For example, that Sears photo customers will always need someone to make photo copies for them, or that the "change battery" light on a smoke detector needs only to be illuminated at the moment that the low battery is detected.

Here's another one. It's from the weekly mailer of "Big Lots," a discount department store chain that sells items that manufacturers have overproduced is too expensive to keep in inventory:

The Cricut Create(TM) personal electronic cutter combines the portability of the original Cricut Machine with the functionality of the Cricut Expression(TM)! step up includes DonJuan cartridge over $50 value, 6" x 12" cutting mat, power adapter & instructional DVD, no computer needed

I don't know what a Cricut Machine does. I don't know what a Cricut Expression does. I don't know what a DonJuan cartridge is supposed to be. If it's used for scrapbooking I might be interested in getting it for my wife who's into that (we actually buy quite a bit of her scrapbooking stuff at Big Lots), but I honestly have no idea why I should buy this.

The value proposition statement for a product should be written up not just so that engineering understands what thye're trying to build, but so that customers understand that it will address their needs. Since your engineers understand your core business, the marketing message used to attract customers probably will be different and should not assume the customer knows what you do. If after all is said and done 3 out of 4 grandmas still don't understand why anyone would buy the product, perhaps it's time to bring in a creative marketing agency.

Monday, February 8, 2010

I've got two cats. One eats store-bought food. He's a healthy eater, lean, and strong. The other has a weight problem. She's very rolly-polly, and eats in her spare time (which is almost all the time) so the vet put her on a special, low-calerie diet. The food costs an arm and a leg. 'course, both cats eat each others' food.

Then I was talking to someone who said they have a problem with raccoons coming in the dog door at night and eating the food.

What to do?

I've got an idea: when the pet bends down to eat, their pet license hits the side of the dish, right? Add a small RFID chip and when the right animal bends over, a door in the top of the dish opens that allows them access. No chip, no access. Wrong pet, no access.

If you think it's a good idea, help me bring it to market. This week, Quirky will bring to market somebody's idea for a new product. They do it every week. Trouble is, lots of ideas are submitted, and they'll only do the one that earns the highest number of votes. There are 28 other ideas this week.

Click here: http://ow.ly/15fuG to vote (I call it the "Petsecure Food Dish," to be renamed by Quirky voters if it wins).

Tuesday, February 2, 2010

Per Santa Clara County code, there is a fire alarm in every bedroom of the house, including hallways. Since we have a gas furnace, gas range, and a gas fireplace, I decided carbon monoxide detectors would be a good idea too. Each of my fire alarms is the same model -- a Kidde, talking combination fire alarm. It will tell you whether there is a fire or whether it's a carbon monoxide alert. There is a separate red light that blinks if the battery is low.

One night I was awoken by "{BEEP!} LOW BATTERY!" Thinking it was just a fluke, I ignored it and tried to go back to sleep. About 5 minutes later, I heard it again. "{BEEP!} LOW BATTERY!" Hmmm... guess I better investigate. I walked around the house and looked at each of the fire alarms. No lights were blinking, each had a green light on indicating it was plugged into the house's electrical system and working properly.

This went on for hours, with me and my wife almost going to bed, then hearing the beep and running to where we thought it was coming from, going from room to room trying not to wake the kids in the process. In the end I discovered that the red "low battery" light would illuminate only when the unit was beeping or talking.

The product manager for this product must have written an engineering or QA requirement that read something like this, "red LED light illuminates if battery is low," instead of "red LED light will help customer find fire detector with low battery." That would have made all the difference in the world.